The Relevance Of Judicial Procedure For Economic Growth
Source: CESifo Group
It has been argued that procedural formalism undermines economic efficiency by fostering rent-seeking and corruption. The authors challenge this view by arguing that a number of judicial procedures foster economic growth by increasing the predictability of court decisions, which leads to more transactions and higher investment levels. They investigate the effects on economic growth of 15 judicial procedures. Employing a standard growth model, they find in a cross-section of 67 countries that timeliness, written - as opposed to oral - procedures, and the right to counsel has a positive effect on growth, whereas the number of independent procedural actions as well as the presumption of innocence has negative effects.